A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

47 comments:

Glass Half Empty
said...

Looks like Phoenix and LostWages are just about back to the trend line and heading into overshoot. In light of their water problems, those are markets to continue avoiding even after they overshoot the natural bottom by 20%.

As for the media, Qweefer, try taking that advice in general, not just with housing.

I don't know about Phoenix or realtors or any of that bullshit. What I do know is I bought a house in 1998 for $177,000 and sold it in 2006 for $761,000. I lived in the house for 8 years paying less in mortgage costs than I would have paid in rent. I also made a tax free profit of about $450,000 after taking into account selling costs and the various costs in repairs/maintenance and property taxes over the years. All that on a n initial investment (down payment) of $25,000. If $450,000 return on $25,000 over 8 years isn't a good investment I don't know what is.

Real estate is not always a good investment, but sometimes it is an amazing investment. The key is to figure out when each of that time period is.

Real estate is the greatest investment on earth.You definitely have to time your buys and sells right.A lot of smart people made a shitload of money off of the sheeple once again.They learned a great lesson early in life:

Bulls make money, bears make money and hogs get slaughtered!!!!! There were a bunch of hogs out there.

I just purchased a house (slightly over 3x national median income, or about 120x rent amount) recently. I plan on being here for at least 10 years and at 6.4% I'll pull down quite a bit of change when I go to sell it. I waited for the right time and I've probably lost a couple thousand in equity since I bought it last year, but overall it has stayed the same and I'll make it up soon enough and be positive.

Okay, 5.2%, fair enough but that's the nominal right? not the actual inflation-adjusted...if that were taken into account it would probably be 1%. I think Schiller figured that out at one point. A house is a place to live in and you have to be able to actually afford it according to income. Duh! as for the Anon asswipe who loves to tell us how he made a huge amount of money from a house he bought in 1998...he sold at the height of the bubble...good for him but it doesn't prove that real estate is the best investment and was a f'in asset bubble buddy and either you were lucky or you just knew it was all too good to be true. You probably then went and bought a McMansion squandering your profit on the first house. Good luck now.

Real estate is not a good "investment" when you are using crazy loan products in order to "afford" the next best thing.

That is called speculation pure and simple.

IMHO the past 8 years have been nothing but rampant speculation fueled by the housing cheerleaders (NAR, homebuilders, mortgage co's) and access to cheap money. There were no fundamentals and now we see the fallout.

I made money on both internet stocks and real estate - BUT . . .I knew that internet stocks were a bunch of junk going in, so never held them more than a few months. . .housing?? We bought rental property in 1991-1993 in Bay Area (rents covered costs) and sold in 2003 - 2006. . .yes, timing is everything - I always tell my clients - FUNDAMENTALS WILL ALWAYS WIN OUT!!!!!. . .in stocks, earnings, prices earnings ratios, balance sheets, etc. will win in the long run. . .in housing, it is rent to own ratio. . .simple as that. . . We are actually getting to the point in San Diego, where I could buy a one bedroom condo for about $185K and rent it for $1500 a month. . .we are pretty much there on a few select properties.

It is amazing how the anons completely miss the point. Real estate has been a bad investment since 2004, and that date moves farther back EVERY DAY as prices drop every day. By this time next year real estate will have been a bad investment since 2003, and so on. Think its hit bottom? Go ahead and join the knife catchers.RE has been an inflation+1% "investment" in the long term. As prices continue to plummet that 6.9% number continues to go down as well.I am so happy for the geniuses who got in at the bottom in the mid-late 1990s and got out in 2004-2006. You made a killing. Take the money and run, and shut up.

Seven percent compounded overeight years is 71 percent; soit's a great time to buy a home.

Unless the nexus of incompetence,poor health, debt, panic, and rising Asia brings homes to a compound of threepercent over ten years, whichwould be 35 percent in 2010.I expect this scenario, even withmore immigration of educated,healthy, and responsible Asians.

"Conditions in the mortgage and credit markets have not abated and, therefore, we need to respond aggressively by further reducing both operating costs and business risk."ResCap Chairman and Chief Executive Officer Tom Marano

On Sept. 2, 2008, a plan was approved that included closing all 200 GMAC Mortgage retail offices, ceasing originations through the Homecomings wholesale broker channel, further curtailing business lending and international business activities, and right-sizing functional staff support. In addition, the company is evaluating strategic alternatives for the GMAC Home Services business and the non-core servicing business.

Worthless realtor info.6.9% or whatever, it doesn't really matter. What matters when it comes to selling or buying is the trend. And remember that if your house goes down 50% in price, it will have to go back up 100% to get to where it was. Just like with stocks.

all i know is i loaned the money to those 177,000 dollar house buyers and made an average of 2 percent a year in interest and now expected to be able to buy 177,000 dollar houses not at 750,000 or banking money is a very large mistake and thus bankers do not need depositors to loan anymore as government and taxpayers will do it and pay taxes to have this entitlement or socialiusnm /communism done.... as no way would i loan money to people to buy ridicolously priced houses ...........

A couple months ago I said "Houses should be for living in" during a discussion about out of control house sale prices. Everyone else shook their heads at me and implied that notion was unrealistic and childish.

People simply don't think that the purpose of a house should be to provide shelter. When did this happen?

and the yearly tax on that 700,000 dollar house is more than the true average wage so everybody will either be forced to sell in a market where only fools will lend money for home buying (or government)...or the houses must be sold at lower prices in order to get the taxes down and the tax and spender locals will still keep their taxes up in order to mainain income and control and pay all the unfunded mandates until overthrown somehow anfd/or the dollar value and economy hits maxi skids......

In San Diego the median price in 1998 was $195K. In 2006 it was $615K. $177K to $750K is plausible. There were shithole tear downs going for $1M at the height of the frenzy which were bought for $50K in the 70s.

so with no affordable lenders who will buy high priced and overpriced houses?????????????// id offer today no more than 65,000 cash for his 700,000 dollasr house and thus see local taxes supossedly fall 80 percent also..........

better yet look at 2006 inflation adjusted dollars for for san diego going back to 1987

1987: $254K2000: $313K2008: $446K

Right you are HP, an awful investment that real estate is. And that's with the early 90s crash and the current crash factored in. Buying in 1987 was buying at the peak of the last bubble. And even so 20 years later that investment was a good one.

updated 1 hour, 11 minutes agoLINCOLN, Neb. - Gary Oden has known for weeks that the plant where he has spent the last 19 years helping build Vise-Grips, one of Nebraska's most famous products, would be shutting down.

But he still wasn't completely prepared for the meeting at 5:30 Wednesday morning.

He and other employees were officially told the bad news, the kind that has stung workers in upper Midwestern states for years but is relatively uncommon in Nebraska: The DeWitt plant is shutting down so operations can be moved to China.

"It's a kick in the head," Oden said from a DeWitt bar where employees gathered to discuss the announcement and "try to forget about it."

Nati Harnik / APOne of the original 1924 Vise-Grip pliers is held next to Contemporary Vise-Grip pliers, at the Irwin Vise-Grip manufacturing plant, in DeWitt, Neb.--------------------------------------------------------------------------------

Newell Rubbermaid owns the Vise-Grip brand. A plant employee said managers were in meetings Wednesday and not available to comment.

About 300 people work at the plant, which for decades has anchored the southeast Nebraska town of DeWitt, population 572.

The plant closure is sure to rattle more than the town's residents and the plant's workers.

Vise-Grip is an iconic name in Nebraska, one of the most famous products invented or developed in the state, along with Kool-Aid, raisin bran, and the Reuben sandwich.

The locking pliers have been manufactured in DeWitt for more than 80 years. DeWitt blacksmith and Danish immigrant William Petersen got a patent for the device in 1924.

American Tool sold out in 2002 to Newell Rubbermaid, a minority owner since 1985. Since then, the DeWitt plant has operated under the name of Irwin Industrial Tools, a company American Tool bought in 1993.

Oden said employees were told that "to keep the Vise-Grip name competitive, they had to move to China."

i bought my one bedroom condo in 1996 for $38,900 with $2000 down as a reo, at the bottom of the last market. it went up to $300,000 two years ago and now its $200,000 and still falling. i think i got lucky, it happens. i have proof on zillow if you research.

20-25% down here in the San Fernando valley.but in my neighborhood is about 30% down in the last 18 months.

there's a reason why this prices haven't gone lower sooner,the general belief around here is that things will get better early next year.that belief is fading since more and more people keep getting laid off from work and there are very few jobs here.

That graph looks like the Google trends graph for HP, after Keith became a troll for MSNBC a year or so ago. Going out on top my arse. So tell us Keith, how much are you getting from the ultraliberals to sell your soul to the devil? Good money? I guess you gotta do what you gotta do, especially after you ran out of money in London. You should have used the proceeds from your speculative home sale in AZ to buy more assets and not blow it all in Europe. Now back to reality in the US by November, pushing paper in a cubicle from 9 to 5, with breaks to pray facing Chicago on your little moveon.org rug.

Just like Orwell's 1984, let's not try and re-write history by denying there truly WAS a housing bubble. The realtor is not making up stuff: yes, prices exploded to the upside with double-digit growth for quite a few years, primarily because people were seeing housing as a "can't miss" investment. So much so, that people who couldn't afford the houses had to resort to any means necessary to finance them, and greedy lenders were all too willing to do so. All that did was buy an extra year or so for many REIC members to make a few more easy $$$, as well as to search for bag-holders.

So it was all well and good, until the eventual revision to the mean occurred (what the stock traders refer to as a Fibonacci retracement), and it kicked in with a vengeance. Newton said it well: "what goes up MUST come down".

The thing that's funny to me is that the charts STILL reflect prices being too high: let's say you bought for $100k in 2002, and prices peaked at $350k a few years later. These owners are now crying that prices have pulled back to $250k (down $100k from the peak), but aren't they STILL up $150k?

I'm sure they're scared of further price erosion, but then buying a 2nd (or 3rd, or 4th, etc) house as an investment was always speculation. Now that Rome is burning, it might be wise to bail out while the bailing is still possible....